Lowell Company acquired 90 percent of Boston Company’s 100,000 outstanding shares on January 1, 2019, for...
Lowell Company acquired 90 percent of Boston Company’s 100,000 outstanding shares on January 1, 2019, for $234,000 cash. Boston’s share was actively traded at $2.50 per share on the market, which is deemed as the NCI’s fair value per share.
Boston's stockholders' equity consisted of common stock of $120,000 and retained earnings of $80,000. An analysis of Boston's net assets revealed the following:
|
Book Value |
Fair Value |
||||||
|
Buildings (10-year life) |
$ |
10,000 |
$ |
8,000 |
|||
|
Equipment (4-year life) |
14,000 |
18,000 |
|||||
|
Land |
5,000 |
12,000 |
|||||
Any excess consideration transferred over fair value is attributable to Goodwill.
During 2019 and 2020, each year Boston reports net income of $40,000 and paid dividends of $10,000.
What is the balance of Lowell’s general ledger “Equity in Boston’s Income” on 12/31/2020 before Lowell closes its book?
How much should Lowell report the end-of-year NCI on the consolidated financial statement on 12/31/2020?
How much should Lowell report Consolidated Net Income Attributable to NCI (or NCI in Boston's Earnings) on the consolidated financial statement on 12/31/2020?
What is the dollar amount balance of Lowell's Investment in Boston account on 12/31/2020?
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